Microsoft Finalizes Acquisition of Cloud Security Vendor Adallom

Microsoft announced today that it has officially bought Israeli security firm Adallom for $250 million.

The two companies confirmed the acquisition after the deal had previously been rumored in July. Earlier on, the deal was estimated to come in at a much higher price tag of $320 million. The buy looks to strengthen Microsoft's security across its portfolio of cloud-based services.

"Adallom expands on Microsoft's existing identity assets, and delivers a cloud access security broker, to give customers visibility and control over application access as well as their critical company data stored across cloud services," said Microsoft in a released statement. "Adallom works with popular cloud applications including Salesforce, Box, Dropbox, ServiceNow, Ariba, and of course Office 365."

While the specific details of the deal have not been made public, it's rumored that the acquisition could reach the initially thought figure of $320 million if Adallom can prove that it can be a $10-million-a-year business, according to Fortune.

Founded in 2012 by a group of Israeli security pros, Adallom specializes in what it calls a non-intrusive, flexible security-as-a-service platform that protects collaboration and storage data migrating to the cloud. It provides a window for IT to monitor data sharing, user access and adheres to specific industry compliance requirements for keeping sensitive data secure. Its SmartEngine heuristics engine monitors activity and uses 74 variables to spot, alert and stop threats before they can cause damage. Some of the firm's customers include FireEye, SAP, Netflix, Hortonworks, Pivotal and HP, to name a few.

Adallom said that the acquisition has been the end goal of the group for the past couple of years. "Adallom started 2.5 years ago when Ami, Roy and I saw an opportunity to solve a challenge -- helping our customers that were looking for a way to keep their data safe in cloud applications, said Assaf Rappaport, cofounder and CEO at Adallom. "We've come a long way since those early days. Our customers have validated our solution and position in the market as a premier cloud security innovator in the industry."

The move will help to provide additional funding to the company for continual development of its security-as-a-service platform, and adds to its $49 million gained from private investors in the last two years.